Correlation Between Playmates Toys and Booking Holdings
Can any of the company-specific risk be diversified away by investing in both Playmates Toys and Booking Holdings at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Playmates Toys and Booking Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playmates Toys Limited and Booking Holdings, you can compare the effects of market volatilities on Playmates Toys and Booking Holdings and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Playmates Toys with a short position of Booking Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playmates Toys and Booking Holdings.
Diversification Opportunities for Playmates Toys and Booking Holdings
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Playmates and Booking is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Playmates Toys Limited and Booking Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Booking Holdings and Playmates Toys is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Playmates Toys Limited are associated (or correlated) with Booking Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Booking Holdings has no effect on the direction of Playmates Toys i.e., Playmates Toys and Booking Holdings go up and down completely randomly.
Pair Corralation between Playmates Toys and Booking Holdings
Assuming the 90 days horizon Playmates Toys Limited is expected to generate 5.73 times more return on investment than Booking Holdings. However, Playmates Toys is 5.73 times more volatile than Booking Holdings. It trades about 0.03 of its potential returns per unit of risk. Booking Holdings is currently generating about -0.15 per unit of risk. If you would invest 6.80 in Playmates Toys Limited on October 28, 2024 and sell it today you would lose (0.30) from holding Playmates Toys Limited or give up 4.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playmates Toys Limited vs. Booking Holdings
Performance |
| Timeline |
| Playmates Toys |
| Booking Holdings |
Playmates Toys and Booking Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playmates Toys and Booking Holdings
The main advantage of trading using opposite Playmates Toys and Booking Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playmates Toys position performs unexpectedly, Booking Holdings can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Booking Holdings will offset losses from the drop in Booking Holdings' long position.| Playmates Toys vs. Booking Holdings | Playmates Toys vs. Oriental Land Co | Playmates Toys vs. ANTA Sports Products | Playmates Toys vs. Li Ning Company |
| Booking Holdings vs. Salesforce | Booking Holdings vs. Gruppo Mutuionline SpA | Booking Holdings vs. RELIANCE STEEL AL | Booking Holdings vs. Insteel Industries |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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